Dismissed¶61

Mahaboobsab S/O Khadri S/O Sahabuddin Peerjade v. Imtiyaz S/O Ahmed S/O Abdulirahiman Panchamahaldar

Karnataka HC20 Jun 2025CRL.A/100401/2017

Case brief

AI extract

What is this about?

S.138 NI Act acquittal; complainant's appeal under S.378(4) CrPC; cheque No.717747 for Rs.9,64,000 dishonoured (account closed); presumptions under Ss.118 & 139 NI Act rebutted by probable defence of cheque misuse (Ahmedraza Sirkaji); agriculturist complainant's lending capacity doubted; High Court of Karnataka, Dharwad Bench; single judge Justice Rajesh Rai K; appeal dismissed (2025).

What did the court decide?

None to the appellant; the appeal was dismissed and the acquittal of the respondent/accused recorded by the learned Magistrate remains undisturbed. ¶61

Mahaboobsab S/O Khadri S/O Sahabuddin Peerjade Vs Imtiyaz… — Cheque Dishonour | Karnataka HC (2025)

What the court decided

AI extract

Outcome

None to the appellant; the appeal was dismissed and the acquittal of the respondent/accused recorded by the learned Magistrate remains undisturbed.

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Issue for consideration

Whether the Trial Court is justified in acquitting the accused for the offence punishable under Section 138 of the N.I. Act?

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Court's answer

The cheque Ex.P.1 and the signature of the accused on it were not seriously disputed; the accused's defence was that the cheque had been issued to one Ahmedraza Sirkaji and was later misused by presenting it in the complainant's name for unlawful gain.

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Ratio / Principle

The complainant failed to establish his lending capacity and the source of the odd amount of Rs.9,64,000/-: he admitted an annual agricultural income of Rs.3 to 4 Lakh shared with his mother and brother, stated that Rs.5,00,000/- was paid from savings and the balance from hand loans of friends and relatives whom he did not examine; on an overall examination of the entire evidence, the defence put forth by the accused is a probable one.

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Key takeaways

Although the initial presumption under Sections 118 and 139 of the N.I. Act favoured the complainant, the accused successfully rebutted that presumption by placing a probable defence, consistent with the settled position of law of the Hon'ble Apex Court and this Court.ratio¶54
The judgment of the learned Magistrate does not call for any interference; the sole point is answered in the affirmative, i.e., the Trial Court is justified in acquitting the accused for the offence punishable under Section 138 of the N.I. Act.ratio¶58

Detailed headnote1 paragraphs

Complainant's criminal appeal under Section 378(4) Cr.P.C. against the acquittal of the accused under Section 138 of the Negotiable Instruments Act, 1881 (C.C.No.72/2013, Civil Judge and JMFC, Savanur, dated 07.11.2017). Cheque No.717747 dated 30.07.2012 for Rs.9,64,000/- drawn on Axis Bank, Hubli Branch, allegedly issued towards repayment of a hand loan advanced on 01.06.2012, was dishonoured as 'the account was found to be closed'. The cheque and the accused's signature were not seriously disputed; the defence that the cheque had been issued to one Ahmedraza Sirkaji and was misused was held probable. The complainant's lending capacity was doubted: he admitted an annual agricultural income of Rs.3 to 4 Lakh shared with his mother and brother, Rs.5,00,000/- paid from savings, the balance allegedly borrowed from friends and relatives whom he did not examine, and no explanation for the odd amount of Rs.9,64,000/-. The presumptions under Sections 118 and 139 N.I. Act were held successfully rebutted by the probable defence. The sole point was answered in the affirmative and the appeal was dismissed.

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NC: 2025:KHC-D:7888 CRL.A No. 100401 of 2017

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HC-KAR

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IN THE HIGH COURT OF KARNATAKA, DHARWAD BENCH DATED THIS THE 20^TH DAY OF JUNE, 2025

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BEFORE

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THE HON'BLE MR. JUSTICE RAJESH RAI K

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CRIMINAL APPEAL NO.100401 OF 2017 (A)

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BETWEEN:

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MAHABOOBSAB S/O. KHADRI S/O. SAHABUDDIN PEERJADE, AGE: 42 YEARS, OCC. AGRICULTURE, R/O. FAKKIRANANDIHALLI, TQ. SAVANUR, DIST. HAVERI.

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…APPELLANT

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(BY SRI. SAJID GOODWALA, ADVOCATE FOR SRI. JAGADISH PATIL, ADVOCATE)

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AND:

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Digitally signed byYASHAVANT YASHAVANT NARAYANKAR NARAYANKAR Date: 2025.06.24 10:12:13 +0530

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IMTIYAZ AHMED S/O ABDULRAHIMAN PANCHAMAHALDAR, AGE: 44 YEARS, OCC. BUSINESS, R/O. GARDENPET, HUGAR ONI, OPP. TO MARUTI TEMPLE, TQ. HUBBALLI, DIST. DHARWAD.

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…RESPONDENT

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(BY SRI. SANTOSH B. MANE, ADVOCATE)

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THIS CRIMINAL APPEAL IS FILED UNDER SECTION 378(4) OF CR.P.C., SEEKING TO SET ASIDE THE JUDGMENT AND ORDER PASSED BY THE CIVIL JUDGE AND JMFC, SAVANUR IN C.C.NO.72/2013 DATED 07.11.2017 AND CONVICT THE RESPONDENT FOR THE OFFENCE PUNISHABLE UNDER SECTION 138 OF N.I.ACT BY ALLOWING THIS APPEAL.

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NC: 2025:KHC-D:7888 CRL.A No. 100401 of 2017

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HC-KAR

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THIS APPEAL, COMING ON FOR FURTHER HEARING, THIS DAY, JUDGMENT WAS DELIVERED THEREIN AS UNDER:

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ORAL JUDGMENT

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(PER: THE HON'BLE MR. JUSTICE RAJESH RAI K)

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In this appeal, the appellant/complainant assailed the judgment passed in C.C.No.72/2013, dated 07.11.2017, by the Civil Judge and JMFC, Savanur (hereinafter referred to as the 'learned Magistrate'), whereby, the learned Magistrate acquitted the accused/respondent for the offence punishable under Section 138 of the Negotiable Instruments Act, 1881 (for short 'N.I. Act').

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For the sake of convenience, the parties are referred to as per their rankings before the Trial Court.

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The abridged facts of the case are that, the complainant and the accused are known to each other. In the year 2012 i.e., on 01.06.2012, the accused requested the complainant for a hand loan of Rs.9,64,000/-. Due to their friendship, the complainant agreed the accused's request and paid the said amount subject to the condition that the accused would repay the same within one month. However, the accused

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HC-KAR

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failed to repay the loan as agreed by him. Subsequently, the complainant insisted the accused for repayment for the loan amount, for the same, the accused issued a cheque bearing No.717747 dated 30.07.2012 for an amount of Rs.9,64,000/drawn on Axis Bank, Hubli Branch. The said cheque was presented for encashment by the complainant through his banker on 13.09.2012. However, the said cheque was dishonoured for the reason that ‘the account was found to be closed’. The same was informed to the complainant by the complainant’s bank by issuing a memo dated 24.09.2012. The said aspect was intimated by the complainant to the accused by issuing legal notice dated 17.10.2012 and the same was served on accused. Subsequently, the accused replied to the said notice on 22.10.2012, however he failed to repay the said hand loan. Left with no other option, the complainant filed a private complaint against the accused under Section 200 of the Criminal Procedure Code (Cr.P.C) for the offence punishable under Section 138 of the Negotiable Instruments Act (NI Act) before the Trial Court.

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HC-KAR

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To prove the case before the learned Magistrate, the complainant himself examined as PW.1 and also examined 2 witnesses on his behalf as PW.2 and 3 and marked 22 documents as Exs.P1 to P22. Though the accused did not examine any witness on his behalf, however marked 1 document as Ex.D.1.

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After assessment of oral and documentary evidence, the learned Magistrate acquitted the accused for the offence punishable under Section 138 of N.I Act. Aggrieved by the same, the complainant preferred this appeal.

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Heard Sri.Sajid Goodwala, learned counsel for the

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complainant and Sri.Santosh B Mane, learned counsel for the respondent-accused.

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The primary contention of the learned counsel for the complainant/appellant is that the learned Magistrate has grossly erred in acquitting the accused, despite the complainant providing sufficient evidence to prove that the accused had obtained a legally recoverable debt and had issued the dishonoured cheque for the discharge of the said debt, the Trial

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HC-KAR

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Court failed to consider the same and acquitted the accused. He further contended that though the complainant is an agriculturist, he proved his lending capacity by producing Exs.P.8 to P.12 i.e., RTC extracts, which shows that the complainant had sufficient source of income to lend the amount in question. Further, according to the learned counsel, the accused failed to rebut the initial presumption arising under Sections 118 and 139 of the N.I. Act, by placing probable defence. These aspects are not considered by the learned Trial Court, hence, the impugned judgment is liable to be set aside. Accordingly, he prays to allow the appeal by convicting the accused for the offence punishable under Section 138 of the N.I. Act.

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Refuting the submissions made by the learned counsel for the appellant, the learned counsel for the respondent/accused contended that the Trial Court, after meticulously examining the entire evidence on record, has passed a well-reasoned judgment which does not call for any interference at the hands of this Court. He contended that the complainant totally failed to discharge the initial burden by

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HC-KAR

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placing cogent evidence and records. According to him, the amount mentioned in the cheque-Ex.P1 itself creates a doubt in respect of the alleged transaction. Further, the complainant being an agriculturist, totally failed to prove his lending capacity. Per contra , the accused placed probable defence that the cheque in-question was issued to one of his friends viz., Ahmedraza Sirkaji and the same was misused by the complainant for unlawful gain. Accordingly, he prays to dismiss the appeal.

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Having heard the learned counsel for the respective parties and on perusal of the evidence and the documents available on record, the sole point that surfaces for my consideration is:

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Whether the Trial Court is justified in acquitting the accused for the offence punishable under Section 138 of the N.I. Act?

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As could be gathered from the records, the cheque in question i.e., Ex.P.1, and the signature of the accused on it is not seriously disputed by the accused. However, it is the specific defence of the accused that the cheque in-question was

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HC-KAR

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issued to one Ahmedraza Sirkaji, a representative of unemployed muslim youth of Hubballi, for getting employment in Gulf countries for the needy people by some of the organization, the complainant was ready to stood as a surety for them. As such, the complainant issued a cheque in question to the said Ahmedraza Sirkaji. Later, the said cheque-Ex.P.1 was misused by Ahmedraza Sirkaji by presenting the same in the name of the complainant for unlawful gain. The said defence was taken by the complainant in the reply notice and also in his evidence.

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It is the specific stand of the complainant that the cheque in-question was issued for repayment of the hand loan which was obtained by the accused in the year 2012. Though the complainant placed Exs.P.8 to P.12-RTC extracts to substantiate that he had the lending capacity to advance a hand loan of Rs.9,64,000/-, however, in his cross-examination, he has specifically admitted that his annual income was Rs.3 to 4 Lakh from his agricultural source. The said income not only belongs to him but also to his mother and brother. Further, in the cross-examination, he has admitted that, out of

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HC-KAR

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Rs.9,64,000/-, a sum of Rs.5,00,000/- was paid by him in cash which was the savings from his income and for the remaining amount, he obtained hand loan from his friends and relatives and paid the same to the accused. However, he failed to examine any of his friends or relatives for having obtained hand loan. As rightly contended by the learned counsel for the respondent/accused, there is no explanation is forthcoming in respect of the amount in question i.e, Rs.9,64,000/-. The complainant failed to explain under what circumstance the odd amount of Rs.9,64,000/- was lent to the accused. On an over all examination of the entire evidence on record, the defence put forth by the accused is a probable one.

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No doubt, the initial presumption arising under Sections 118 and 139 of the N.I. Act favours the complainant, but as per the settled position of law by the Hon’ble Apex Court and this Court, the said initial presumption can be rebutted by placing probable evidence. In the instant case, the accused successfully rebutted the initial presumption by placing the probable defence. In that view of the mater, I am of the considered view that the judgment under this appeal does not

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NC: 2025:KHC-D:7888 CRL.A No. 100401 of 2017

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HC-KAR

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call for any interference. Accordingly, I answer the point raised

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above in the affirmative and proceed to pass the following:

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ORDER

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